How to Use Options for Trading? Bitcoin Market Analysis Example (3)

Strategy Introduction**: **

In the first and second articles of this series, we covered ATM options (At-the-Money options) and OTM options (Out-of-the-Money options), along with corresponding strategies based on the market conditions at the time. This article will cover the final type—ITM options (In-the-Money options)—and how to use ITM option strategies to navigate today's market.

Based on the judgment that the probability of continued downward movement outweighs a reversal, here is a simple OKX options simulated trading strategy:

1. Simply sell a relatively near-the-money ITM call option. If today's market continues to decline, the sold call option will very likely become at-the-money or even out-of-the-money, meaning it could become worthless at expiration, and the premium received from selling the option can be safely pocketed.

2. Here is also a slightly more advanced strategy: while buying an ITM (In-the-Money) put option, simultaneously sell an OTM (Out-of-the-Money) put option. If the market continues to decline, the ITM option's price will increase, generating returns; if the market stays range-bound without declining, the returns from the sold option can offset the time decay of the bought option, allowing you to continue waiting for market volatility to generate returns.

ITM (In-the-Money): In-the-Money options. For call options, it means the current underlying price is higher than the strike price. For put options, it means the current underlying price is lower than the strike price. Simply put, the underlying has already risen above the call price, or already fallen below the put price.**.**

What are the differences and各自的优劣势 between In-the-Money, Out-of-the-Money, and At-the-Money options? The differences are actually quite obvious and can often be spotted right on the trading page. As shown in the image below, if Bitcoin's current price is just over 6,500, the red box represents ITM (In-the-Money) options, the green box represents ATM (At-the-Money) options, and the blue box represents OTM (Out-of-the-Money) options. The most significant difference is the vast difference in option premiums. The second important difference is that, generally speaking, ATM (At-the-Money) options or options closest to at-the-money have the best liquidity, meaning the spread between the bid and ask prices is the smallest. For frequent traders, the losses from spreads caused by trading can be correspondingly reduced, and you won't end up in the awkward situation of having to "pay more to buy" or "sell at a discount."

On this page, besides viewing all option contract quotes, you can also see Account Assets information, highlighted in the yellow box in the image. Don't underestimate the importance of this section! For example, it addresses concerns about margin reduction and liquidation deficits.

When to trigger margin reduction is easy to calculate: when "Account Balance" is less than "Maintenance Margin," the account will be protected by the system and trigger margin reduction to lower risk. Another advantage at OKX is the tiered margin reduction system. The system continuously monitors the account and margin status in real time. When the account balance is sufficient, margin reduction stops immediately to protect the user's remaining positions. When "Account Equity" equals zero or falls below zero, the account is considered to have a liquidation deficit, preventing the user from incurring additional risk losses.

Whether it's call options or put options, for option buyers, there is no additional risk—they cannot be liquidated! So if you only hold long positions, the "Maintenance Margin" will always be zero, and you don't need to worry about liquidation! However, for sellers, the "Maintenance Margin" will have a specific amount, so be sure to manage your risk carefully. Ultimately, we hope everyone achieves satisfying returns and never has to experience liquidation or liquidation deficits.

Disclaimer

This article may contain product-related content not applicable to your region. This article is intended to provide general information only and does not make any representation as to the accuracy or completeness of any facts herein. This article represents the author's personal views only and does not constitute the views of OKX. This article is not intended to provide, and should not be relied upon as, any of the following: (i) investment advice or investment recommendations; (ii) offers or solicitations to purchase, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets (including stablecoins) involves a high degree of risk and may fluctuate dramatically, potentially becoming worthless. You should carefully consider whether trading or holding digital assets is appropriate for you based on your financial situation. For questions specific to your circumstances, please consult your legal/tax/investment professional. Any information contained herein (including market data and statistics, if applicable) is provided for general reference purposes only. While all reasonable precautions have been taken in preparing these data and charts, we assume no responsibility for any factual errors or omissions expressed herein. © 2025 OKX. This article may be reproduced or distributed in its entirety, or excerpts of 100 words or fewer may be used, provided such use is non-commercial in nature. Any reproduction or distribution of the entire article must include prominent disclosure: "This article is copyrighted © 2025 OKX, used under permission." Permitted excerpts must cite the article title and include attribution, for example, "Article title, [author name, if applicable], © 2025 OKX." Portions of this content may have been generated or assisted by artificial intelligence (AI) tools. Derivative works and other uses of this article are not permitted.

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